H4 -GST @ GVC

10th February 2021, Wednesday

Spark for the Day

“……Winning doesn’t always mean being first. Winning means you’re doing
better than you’ve done before...”

Today’s Topics:

1. Tax Invoice and Bill of supply

Invoice is a commercial instrument issued by supplier of

goods/services/both to a recipient. It includes the details about parties,

goods, date of shipment and modes of transport, prices and discounts etc.

Invoice is issued by the supplier of goods or services to a recipient

describing the items sold or services supplied, price and discount and the

terms of delivery and payment.

Importance of tax invoice in GST: Section 31 of CGST Act, 2017 mandates

the issuance of an invoice or a bill of supply for every supply of goods or

services.

1. Invoice is an important document on the basis of which tax credit (input

tax credit) is availed by the recipient. A Registered person cannot avail

Input Tax Credit unless he is in possession of tax invoice or a debit note.

2. Tax invoice is an important document which indicates the time of supply.

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Contents of a Tax Invoice

Following are the contents of a tax invoice.

1. Name, address, date of issue and GSTIN of the supplier.

2. A Consecutive serial number

3. Name, address and GSTIN of the registered recipient and the address of

delivery along with the name of state and its code.

4. HSN Code for goods and SAC for services

5. Description, units and quantity of goods.

6. Total/Taxable value of goods or services or both and discount (if any).

7. Rate and amount of Tax GST, SGST, IGST, UTGST or cess.

8. Place of supply along with the name of State in case of inter-state

supply.

9. Whether tax is payable on reverse charge basis.

10. Signature or digital signature of supplier or his authorized

representative.

Number of copies of invoices required

1. For supply of goods – Three copies –Original for recipient, Duplicate for

transporter and Triplicate for supplier.

2. For supply of services- Two copies – Original for recipient and Duplicate

for supplier.

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Time limit for issue of tax invoice (Goods)

1. Registered person supplying taxable goods and supply involves movement

of goods- Before or at the time of removal of goods for supply to the

recipient.

2. Other Cases- Before or at the time of delivery of goods or making

available thereof to the recipient.

Continuous supply of services (Goods supplied on recurrent basis)

Invoice is issued before or at the time each statement is issued or each

payment is received.

Goods sent or taken on approval for sale or return are removed before the

supply takes place: Invoices shall be issued before or at the time of supply or

6 months from the date of removal whichever is earlier.

Supply of services

General Cases- Invoice shall be issued before or after the provision of service

but within the prescribed period of 30 days from the date of supply of

service.

Banking company or financial institution including NBFCs – Within 45 days

of supply of services

Continuous supply of services

1. Date of payment ascertainable from the contract – On or before due

date of payment

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2. Due date of payment is not ascertainable from the contract – Before or

at the time when the supplier of services receives the payment.

3. Payment linked to the completion of an event – On or before the date of

completion of that event.

Bill of Supply

A Bill of supply is similar to a Tax Invoice except for that bill of supply

does not contain any tax amount as the seller cannot charge GST to the

buyer. A bill of supply is issued when:

1. Registered person is selling exempted goods or services or

2. Registered person has opted for Composition scheme

If a registered person is supplying taxable as well as exempted goods or

services to an unregistered person, then he can issue a single invoice-cum-

bill of supply for all such supplies.

Contents of Bill of supply: The details to be included in a bill of supply are:

1. Name, address and GSTIN of the supplier

2. Bill of supply number and date of issue

3. If the recipient is registered then the name, address and GSTIN of the

recipient.

4. HSN/SAC

5. Description of goods or services, value, discount etc .

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6. Signature or digital signature of the supplier.

Composition Dealer

A taxpayer whose turnover is less than Rs 1.5 crores* (Rs. 75 lakhs for

north-east states and Uttarakhand) can opt for composition scheme. A

dealer opting for composition scheme has to deposit tax on their receipts

themselves, they are not allowed to collect any tax from their buyers. The

GST has to be paid out of pocket by the composition dealer. They cannot

charge GST in the invoice.

Thus a composition dealer has to raise a Bill of Supply instead of a Tax

Invoice.

The composition dealer has to mention the words „composition taxable

person not eligible to collect taxes on supplies‟ on the Bill of Supply.

Exporters : An exporter is also not required to charge GST on their invoice.

This is because exports supplies are zero-rated. Hence a taxpayer exporting

goods can issue a Bill of Supply in place of a tax invoice.

The dealer has to mention the following in their Bill of Supply-

“Supply Meant For Export On Payment Of IGST”

“Supply Meant For Export Under Bond Or Letter Of Undertaking Without

Payment Of IGST”

Thank You…. Have a Nice Day

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